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StoxPlus is pleased to introduce Vietnam Logistics Market 2016, the first issue on this sector. This report presents a broad range of topics, both sector-specific and cross-cutting market issues.

The research provides latest information on market size as well as competition landscaping of Vietnam logistics market. Particularly, for this issue, we focus on analysing we focus on analysing three main segments of logistics sector including (i) transportation (Road, Inland Waterway, Ocean, Rail and Air), (ii) Warehousing and (iii) Forwarding. Key financial figures on listed logistics companies are also included.

Below are the most critical findings in our first issue:

1) Total logistics costs in Vietnam are estimated at US$38.85bn in 2015, equivalent to 20.8% of GDP. In 2015, total logistics cost reached US$38.85bn in Vietnam, accounting for around 20.8% of total GDP (US$186bn). Typically, the proportion of total logistics cost in relation to a country’s GDP reveals the state of its logistics sector. The rate in China is 15.4%, in developed countries like the United States (US) and Singapore is about 8-9%.

2) Vietnam logistics sector is in the early development stage with 1,300 companies, of which the majority are providing 1PL and 2PL services. Roughly 70% of these companies are small family-run businesses, and are asset-based service providers (1PL) or contract logistics providers (2PL), providing low-value-added logistics services, e.g. customs clearance, warehousing, transportation by trucks or containers.

3) Foreign-invested players are dominating the market with experience and professional management. Fierce competition from foreign enterprises: though there are only over 25 foreign companies participating in logistics sector, those FDI captured the majority of market share, providing high-value-added logistics service, e.g. international shipping, supply chain management.

4) Infrastructure for logistics in Vietnam posts limited resources for transportation development. Vietnam is short of all kind infrastructures, from of hard infrastructure for economic activities such as electricity, clean water, road, port, airport, and railways to social infrastructure such as schools, hospitals etc. Lack of infrastructure is identified as a serious bottleneck for future growth of Vietnam.

5) Road transport is the backbone of Vietnamese freight transport. Supply chains are exposed to an extensive but inadequate road network. Supply chains in Vietnam rely on an underdeveloped road network to meet its logistics needs, which inevitably leads to congestion and safety issues. Inconsistencies across the transport network in terms of extent and quality are one of the most problematic factors for firms doing business in Vietnam.

6) Forwarding in Vietnam include ICD and CFS service. Regarding for ICD, there are 21 inland container depots (ICD) concentrating in the North and the South. (Central does not have ICD yet) as of 2015. For CFS service, foreign companies dominated the market. Domestic companies mainly play as agency. Biggest players include Gemagept, DRACO and Safi.

7) Warehousing sector in Vietnam can be segmented into two main categories including dry warehouse and cold storage warehouse. Dry warehouse serves storage demand of manufacturers and distributors, especially FMCG companies with big names including DKSH, DHL, Mappletrees, Gemadept, DRACO, Vinafco and Transimex.

8) Three main sources of logistics demand include export, industrial expansion and FMCG market. Of which, export and grocery retailers are expected to be drivers for logistics demand growth in the future thanks to a number of FTAs signed in 2015 such as Vietnam-Korean Free Trade Agreement (VKFTA), ASEAN Economic Community (AEC). Hence, logistics demands including cold storage for preserving the goods serving for importing and exporting purposes are expected to bound.

9) Listed Logistics Companies posted a good performance in the review period with EBITDA margin of 23.0% and operating profit margin of 11.7% in 2015. By groups of companies, transportation service companies earned an abnormal high in EBITDA margin of over 40%, followed by port operation companies (27%) and transportation (15%). Delivery service companies (Viettel Post) earned comparatively low EBITDA margin compared other listed companies